Another rough year awaits RAI

Back from the brink of bankruptcy, Italy’s pubcaster RAI faces a difficult year of cost cuts, potential labor disputes, a sluggish advertising market and talk of a web sell-off.

At year’s end, the government passed a stop-gap emergency measure giving RAI a $ 440 million cash infusion in exchange for extensive budget cuts.

These would include wage freezes, reduction of personnel through early retirement schemes, slashes in programming commissioned from both outside and in-house producers, and less overtime.

Further moves would include cuts in local RAI bureaus and in the pubcaster’s many orchestras, and curbs on “extras”– from cellular phones and chauffeur-driven cars to free periodicals supplied to management.

Sources say even this streamlining won’t be enough.

A look at RAI’s books would undermine the confidence of even the most optimistic accountants. Budgets are notoriously tailored to hide increasing debt; the workforce is over-sized and over-protected; the three webs habitually overspend their production budgets; and the politically appointed management is often more concerned with power politics than with ratings. RAI president Claudio Dematte, who is known as a tough-minded businessman, was installed in July with a mandate to get the broadcaster’s disastrous financial house in order.

Under him, the new RAI is slowly taking shape — with the emphasis on “slow.”

RAI employees — of which there are 13,500, triple the number that toil for rival Fininvest — rumble about striking even at the mention of, say, delay in payment of a Christmas bonus.

Dematte’s restructuring plan is beginning to overhaul network operations. An entire layer of administration is being wiped out and network functions are being centralized in single departments responsible for all three webs.